The United States and Cuba have made a historic breakthrough in their Cold War stand-off, moving to revive diplomatic ties and launch measures to ease a five-decade US trade embargo.
Following a prisoner exchange, President Barack Obama on Wednesday said the US was ready to review trade ties and re-open its embassy in communist Cuba that has been closed since 1961.
In Washington, Obama admitted the US embargo had failed and said he would approach the US Congress to discuss lifting it alongside the advances in diplomatic and travel links.
"We are all Americans," Obama declared in Spanish, in a set-piece White House address.
Cuba's President Raul Castro, in a simultaneous address in Havana, confirmed that the former enemies had "agreed to re-establish diplomatic ties" after more than half a century.
Embargo still to be resolved: Castro
Castro cautioned that the issue of the embargo - which he called a "blockade" - remained to be resolved.
"We have agreed to reestablish diplomatic ties. This does not mean that the main issue has been resolved: the economic blockade," he said in a national address on Wednesday, using the Cuban government's term for the US trade embargo imposed in 1960.
But he praised Obama for taking steps to thaw ties after more than half a century.
"This decision by President Obama deserves our people's respect and recognition," he said.
Cuban, US prisoners released
The breakthrough came after Havana released jailed US contractor Alan Gross and a Cuban who spied for Washington and had been held for 20 years.
The US in turn released three Cuban spies, and Obama said he had instructed the US State Department to re-examine its designation of Cuba as a state sponsor of terrorism.
Gross, a 65-year-old US contractor who had been held for five years on allegations of spying, was welcomed back onto US soil by Secretary of State John Kerry.
Also returning was an unnamed intelligence agent who had caught working for the US in Cuba and held for two decades.
"This man, whose sacrifice known to only a few, provided America with the information that allowed us to arrest the network of Cuban agents that included the men transferred to Cuba today as well as other spies in the United States," Obama said.
In exchange for this second prisoner, the US released three alleged Cuban spies, in what a US official called a "swap of intel assets."
Gross was arrested in 2009 for distributing communications equipment to members of Cuba's Jewish community while working as a contractor for the US Agency for International Development.
"We will end an outdated approach that for decades has failed to advance our interests and instead we will begin to normalise relations between our two countries," Obama said.
The US imposed a trade embargo against Cuba in 1960 and the two countries have not had diplomatic relations since 1961.
The ensuing stand-off was marked by incidents that threatened to turn the Cold War hot, such as the 1962 missile crisis, in which US vessels blocked the island to prevent the delivery of Russian nuclear arms, and the earlier Bay of Pigs invasion by US-backed Cuban exiles.
The embargo hurt the Caribbean island state's economy but failed to unseat the communist governments led by the Castro brothers.
Both leaders hailed Pope Francis, the first Latin American pontiff, for his support in brokering better relations between the long-time enemies.
In a statement, Pope Francis congratulated the historic decision.
US lawmakers mixed on decision
Senior Democratic lawmaker Dick Durbin hailed Wednesday's move.
"Opening the door with Cuba for trade, travel and the exchange of ideas will create a force for positive change in Cuba that more than 50 years of our current policy of exclusion could not," he said.
But Republican Cuban-American Senator Marco Rubio, a champion of the anti-Castro community in Florida, denounced the deal.
"The White House has conceded everything and gained little," Rubio said, in a foretaste of the resistance that Obama will face as he tries to persuade Congress to back a full end to the embargo.
"All this is going to do is give the Castro regime, which controls every aspect of Cuban life, the opportunity to manipulate these changes to perpetuate itself in power."
